Hexagon Annual Report 2019

NOTE 5 CHANGES IN THE GROUP’S STRUCTURE ACQUISITION OF AGILITY FUEL SOLUTIONS IN 2019 With effect from 4 January 2019 Hexagon Composites acquired the remaining 50% of the shares of Agility Fuel Solutions and its subsidiaries. Agility Fuel Solutions is reported as a separate segment in the Hexagon Group from the acquisition date. Agility has production facilities in Salisbury, North Carolina, Lincoln, Nebraska and Fontana, California (US) and Raufoss (Norway) with technology centers in Lincoln, Nebraska and Wixom, Michigan (US) and Kelowna, British Columbia (Canada). Agility maintains sales offices in North America, South America, India, the United Kingdom and Norway. The Agility Group reports financial results as a separate business area, fully consolidated into Hexagon's accounts. The fair value of the identifiable assets and liabilities of Agility Group as at the date of acquisition were: (NOK 1 000) FAIR VALUE RECOGNIZED ON ACQUISITION ASSETS Property, plant and equipment 421 140 Intangible assets 531 344 Cash 36 275 Inventories 339 657 Deferred tax asset 0 Trade accounts receivable 350 813 Other current assets 28 935 Total assets 1 708 166 LIABILITIES Long term liabilities 81 676 Short term liabilities 306 987 Deferred tax liabilities 92 168 Total liabilities 480 830 Net identifiable assets and liabilities at fair value 1 227 336 Goodwill 921 597 Purchase consideration 2 148 933 50% purchase consideration transferred/paid in cash 1 074 467 Analysis of cash flows on acquisition: Net cash acquired with the subsidiary 36 275 Cash paid -1 074 467 AGILITY FUEL SOLUTIONS The fair value of the Agility Group was NOK 2 149 million of which Hexagon Composites ASA Group`s 50% share was NOK 1 074 million. According to IFRS, excess value related to Hexagon Composites ASA Group's 50% share as of 4 January 2019 is presented as gain in a separate line in the financial statements included in operating profit. The net accounting gain was MNOK 69.4 after transaction costs of MNOK 16.4. In the Group's profit for 2019, Agility Group is included from the acquisition date. The goodwill recognized is primarily attributed to the expected synergies and other benefits from combining the assets and activities of the Agility Group with the Hexagon Group. The goodwill is not deductible for income tax purposes. Transaction costs of NOK 16.4 million are part of operating cash flows in the statement of cash flows. 27 113 2019 AT A GLANCE FROM THE BOARD ROOM FINANCIAL STATEMENTS